Beware of oversimplified narratives about the Biden administration’s recent plans to raise the tariff from 25% to 100% on Chinese electric vehicles (EVs), doubling their base cost. For example, President Joe Biden accused Beijing of “cheating” as he announced the measures, but China’s subsidies for its domestic EV industry are arguably just a different approach to an industrial policy strategy that the United States is pursuing as well. The notion that EV tariffs prove President Biden doesn’t care about climate is also misguided. Rather, he is concerned that domestic climate progress will stall if it contributes to the collapse of the U.S. auto industry.
Some have even argued that the tariffs are symbolic since Chinese EV makers do not export to the U.S. That misses the point. The measures are proactive rather than reactive. The Biden administration aims to create a defensible moat so that U.S. automakers’ efforts to build competitive EVs are not wiped out by Chinese imports.
